CH4 Flashcards
Opportunities are a firm’s distinctive competencies that cannot be easily matched or imitated by competitors.
F
The process of performing an internal audit, compared to the external audit, provides more opportunity for participants to understand how their jobs, departments and divisions fit into the whole organization.
T
An internal audit task force of managers could be charged with determining a specific number (usually 10 to 20) of the most important strengths and weaknesses.
T
Proponents of the resource-based view argue that external factors are more important than internal factors for a firm in achieving and sustaining competitive advantage
F
The basic premise of the research-based view is that the mix, type, amount and nature of a firm’s internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage.
T
The subtle, elusive and largely unconscious forces that shape the workplace are captured by the organizational culture.
T
Cultural products include values, beliefs, stories, and language.
T
Metaphors are handed-down narratives of some wonderful event that are based on history but have been embellished with fictional detail.
F
A ritual is a standardized, detailed set of techniques and behaviors used to manage anxieties.
T
10) For a resource to be valuable, it must be either rare, hard to imitate, or not easily sustainable.
T
11) Linkages between a firm’s culture and strategies often determine success.
T
12) Resources that are common are never considered valuable.
F
The RBV theory asserts that it is advantageous for a firm to pursue a strategy that is not currently being implemented by any competing firm.
T
- Some companies are equally strong (or weak) in all areas of their business.
F
Objectives and strategies are established with the intention of capitalizing upon external strengths and minimizing weaknesses.
F
The internal analysis is critically important in the Arab world as upbringing and socialization may induce executives to overestimate strengths and weaknesses
T
- Within large organizations, each division has certain strengths and weaknesses.
T
- Building competitive advantages involves taking advantage of distinctive competencies.
T
- Few successful corporations give considerable attention to both external and internal analysis.
F
Generally, in the Arab world, the internal capacity to assess external environments and explore their trends is lacking.
T
Senior Arab executives should give priority to internal capacity-building processes and encourage creative rethinking of strategic initiatives and external trends.
T
Unlike the external assessment, the internal assessment does not require gathering and assimilating information about the firm’s functional areas.
F
As long as the strategic-management process is overseen by strategists, there is no need for managers and employees from different functional areas to work together to provide ideas or information.
F
Not recognizing and understanding the relationships among functional areas of business can be beneficial to strategic management.
F
Government and nonprofit enterprises have traditionally placed much emphasis on relationships among the business functions.
F
For strategies to succeed, a coordinated effort among all the functional areas of business is needed.
T
- According to RBV theorists, when other firms are unable to duplicate a particular strategy, then the focal firm has a sustainable competitive advantage.
T
- Common resources are not valauble to firms.
F
The RBV theorists say if many firms cannot easily obtain or imitate particular resources then those resources will ensure a competitive advantage.
T
Understanding both external and internal factors and, more importantly, understanding the relationships among them, will be the key to effective strategy formulation.
T
The definition of ‘organizational culture’ emphasizes only the importance of external factors in making strategic decisions.
F
- As culture is remarkably resistant to change, it rarely has any effect on a firm.
F
Since most firms in the Arab world are family-run businesses, organizational culture seems to have evolved rapidly.
F
The culture of family-owned businesses may experience profound changes once the founder has passed away
T
An organization’s culture has no obligation to support the collective commitment of its people towards a common purpose
F
14) An organization’s culture compares to an individual’s personality in the sense that no two organizations have the same culture and no two individuals have the same personality.
T
At Google the culture is very rigid, while in contrast the culture at Proctor & Gamble is very informal.
F
Established companies are coming to realize that their next generation of potential customers spends more time online than watching TV.
T
17) While interesting, organizational culture does not significantly affect business decisions.
F
Allocating resources is one of the five basic activities (functions) performed by managers.
F
The only certain thing about the future of any organization is change.
T
Even if a firm’s culture is not supportive, strategic changes may still be effective or even productive.
F
- An organization’s culture should infuse individuals with enthusiasm for implementing strategies.
T
- An assessment of resource capabilities is crucial for the survival and growth of the firm.
T
Managers seek to maximize strengths and minimize weaknesses while effectively seizing opportunities and avoiding or neutralize threats.
T
SWOT is the second most common method in evaluating a company’s capabilities in the context of a dynamic marketplace.
F
Value chain analysis aims to identify where low-cost advantages or disadvantages exist anywhere along the value chain from raw materials to customer
service activities.
T
- The combined costs of all the various activities in a company’s value chain define the firm’s cost of doing business.
T
- Value chains tend to be similar across different industries and firms.
F
More and more companies are using VCA to gain and sustain competitive advantage by being especially efficient and effective along various parts of the value chain.
T
Probably the easiest part of benchmarking, is gaining access to other firms’ value chain activities with associated costs.
F
- In preparing as IFE matrix, qualitative estimates are usually sufficient.
F
- The IFE matrix provides important information for strategy formulation.
T
20) Organizing is the cornerstone of effective strategy formulation.
F
Planning should be performed mostly by middle management and then presented to top management for analysis and approval.
F
The controlling function of management is especially important for effective strategy evaluation.
T
The purpose of organizing is to achieve coordinated effort by defining task and authority relations
T
24) Motivation is one explanation why some people work hard and others do not.
T
25) of organizing is included in human resource management.
F
26) The controlling function of management is synonymous to strategy formulation.
F
There are seven basic functions of marketing: customer analysis, selling products/services, product and service planning, pricing, distribution, marketing research and opportunity analysis.
T
28) A form of customer analysis is administering customer surveys.
T
Successful strategy formulation generally rests upon the ability of an organization to sell some product or service.
F
A new trend is to base advertising rates solely on sales rates with regard to advertising products or services on the Internet.
T
33) One aspect of ads in a recession is that they generally take more direct aim at competitors.
T
34) Test marketing is used more frequently by industrial companies than consumer goods companies.
F
Five major stakeholders that affect pricing decisions are consumers, governments, suppliers, distributors and competitors.
T
Distribution involves warehousing, marketing research, distribution channels, wholesaling and retailing.
F
Distribution becomes especially important when a firm is striving to implement a product development or backward integration strategy.
F
Marketing research is the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services.
T
A cost/benefit analysis is an appraisal of the costs, benefits and risks associated with marketing decisions.
T
Three areas, according to James Van Horne, comprise the functions or basic decision areas of finance: the investment decision, the financing decision and the dividend decision.
T
41) Financial ratios are not applicable to nonprofit organizations.
F
Dividend decisions concern issues such as the percentage of earnings paid to stockholders, the stability of dividends paid over time and the repurchase or issuance of stock
T
43) The idea that paying dividends results in a higher stock price is a myth.
T
45) Activity ratios measure how effectively a firm is using its resources.
T
46) Leverage ratios measure a firm’s ability to meet maturing short-term obligations.
F
47) Total assets turnover ratio is calculated by dividing sales by fixed assets.
F
Financial ratio analysis rarely has to go beyond the actual calculation and interpretation of ratios.
F
49) A limitation of financial ratios is the fact that they are based on accounting data.
T
50) Capacity decisions concern distances from raw materials to production sites to customers.
F
In most industries, only minor costs of producing a product or service are incurred within operations, so production/operations does not have great value as a competitive weapon in a company’s overall strategy.
F
Honda Motor, long considered the industry’s fastest producer, fills a buyer’s new car order in just 5 days.
F
Increased efficiency, quality, productivity and job satisfaction can come from cross-training workers.
T
Four common approaches to determine R&D budget allocations are: 1) finance as many project proposals as possible; 2) use a percentage-of-sales method; 3) budget for R&D about what competitors spend; or 4) decide how many successful new products are needed and work backwards to estimate the required R&D investment.
T
Internal R&D and contract R&D are the two basic forms of R&D in organizations.
T
56) Spending on research and development is steadily decreasing in the United States.
F
The functions of information systems are growing in importance because organizations are becoming more complex, decentralized and globally dispersed.
T
Value Chain Analysis can enable a firm to better identify its own strengths and weaknesses especially as compared to competitors’ value chain analyses.
T
) Although a useful step in the strategic management process, value chain analysis can rarely help a firm monitor whether its prices and costs are competitive.
F
60) Benchmarking is an analytical tool used to determine whether a firm’s value chain activities are competitive compared to rivals.
T
Constructing an Internal Factor Evaluation Matrix is a summary step when conducting an internal strategic-management audit.
T
62) The Internal Factor Evaluation Matrix should include from 10 to 20 key factors.
T
A firm’s strengths that cannot be easily matched or imitated by competitors are called A) internal audits.
B) distinctive competencies.
C) external audits.
D) special properties.
E) internal properties.
B
Who should perform an internal audit?
A) A private auditing firms
B) The organization’s accounting department
C) Representative managers and employees from throughout the organization
D) A team of top-level managers
E) The chief executive officers
C
________ exemplifies the complexity of relationships among the functional areas of business.
A) Government audit
B) External audit
C) Financial ratio analysis
D) Environmental scanning
E) Distribution strategy
C
The three all-encompassing internal resource categories used in the Resource-Based View are physical resources, human resources and
A) financial resources.
B) shareholder resources.
C) organizational resources.
D) natural resources.
E) technological resources.
C
Organizational resources include all of the following except:
A) employee training.
B) firm structure.
C) planning processes.
D) information systems.
E) copyrights.
A
Empirical indicators are resources that are either rare, hard to imitate, or
A) expensive.
B) inexpensive.
C) easily substitutable.
D) not easily substitutable.
E) inefficient.
D
A pattern of behavior developed by an organization as it learns to cope with its problems of external adaptation and internal integration that has worked well enough to be considered valid and to be taught to new members as the correct way to perceive, think and feel is called
A) dysfunctional behavior.
B) groupthink.
C) behavior modification.
D) organizational culture.
E) internal audit effect.
D
Which of the following were not mentioned as an example of cultural products?
A) Rites
B) Emotions
C) Rituals
D) Sagas
E) Symbols
B
A standardized set of behaviors used to manage anxieties is called a
A) folktale.
B) rite.
C) metaphor.
D) ritual.
E) value.
D
What is the term for a historical narrative describing the unique accomplishments of a group and its leaders, usually in heroic terms?
A) Rite
B) Saga
C) Story
D) Myth
E) Folktale
b
Life-directing attitudes that serve as behavioral guidelines are called
A) values.
B) rites.
C) beliefs.
D) metaphors.
E) legends.
A
) Any object, act, event, quality, or relation used to convey meaning is known as a A) myth.
B) rite.
C) value.
D) symbol.
E) metaphor.
D
) Metaphors are
A) several rites connected together.
B) shorthand of words used to capture a vision or to reinforce old or new values.
C) narratives based on true events.
D) fictional stories.
E) any objects, acts, events, qualities, or relations used to convey meaning.
B
What is the essential bridge between the present and the future that increases the likelihood of achieving desired results?
A) Motivating
B) Planning
C) Controlling
D) Staffing
E) Organizing
B
All of the following are basic duties of a manager except:
A) staffing.
B) planning.
C) consolidating.
D) organizing.
E) motivating.
C
Which of the following does the text call an up-front investment in success?
A) Planning
B) Organizing
C) Motivating
D) Staffing
E) Controlling
A
Which function of management includes areas such as job design, job specification, job analysis and unity of command?
A) Planning
B) Organizing
C) Motivating
D) Staffing
E) Controlling
B
Who does a planning horizon of two to five years apply to?
A) Top management
B) General management
C) Middle management
D) Lower management
E) All levels of management
A
) Synergy
A) is the 2 + 2 = 5 effect.
B) can result in powerful competitive advantages.
C) can be developed by an organization through planning.
D) exists when everyone pulls together as a team that knows what it wants to achieve.
E) all of the above
E
Which management function includes breaking tasks into jobs, combining jobs to form departments and delegating authority?
A) Motivating
B) Staffing
C) Organizing
D) Controlling
E) Planning
C
) Which function of management is concerned with span of control and chain of command?
A) Planning
B) Organizing
C) Controlling
D) Directing
E) Evaluating
B
Which of the following is the process of influencing people to accomplish specific objectives?
A) Staffing
B) Motivating
C) Planning
D) Controlling
E) Organizing
B
________, perhaps the most important word in management, is a major component in motivation.
A) Forecasting
B) Organizational structure
C) Recruiting
D) Management development
E) Communication
E
Staffing involves all of these activities except: A) recruiting.
B) transferring.
C) customer analysis.
D) managing union relations.
E) training and developing.
C
Which function of management includes all of those activities undertaken to ensure actual operations conform to planned operations?
A) Planning
B) Organizing
C) Motivating
D) Staffing
E) Controlling
E
The first step in the controlling function of management is to
A) take corrective actions.
B) restrict breaks employees take.
C) evaluate expense reports.
D) establish performance standards.
E) measure individual and organizational performance.
D
All of the following are key questions that can reveal internal strengths and weaknesses in the management department except:
A) Is the organization’s structure appropriate?
B) Are reward and control mechanisms effective?
C) Are the organization’s products positioned well among competing products?
D) Does the firm use strategic management concepts?
E) Do managers delegate authority well?
C
90) Opportunity analysis is one of the basic functions of
A) marketing.
B) finance/accounting.
C) computer information systems.
D) production/operations.
E) research and development.
A
________ can reveal the demographic characteristics of an organization’s customers.
A) Customer profiling
B) Test marketing
C) Market development
D) The vision statements
E) Telemarketing
A
92) All of the following are basic functions of marketing except: A) value chain analysis.
B) customer analysis.
C) product and service planning.
D) pricing.
E) distribution.
A
Selling includes all of these marketing activities except:
A) advertising.
B) dealer relations.
C) customer analysis.
D) publicity.
E) sales promotion.
C
One aspect of ads in a recession is that they
A) take more direct aim at competitors.
B) do not mention competitors.
C) allude to competitors in a positive light.
D) are less combative.
E) none of the above
A
What marketing function includes test marketing? A) Selling products/services
B) Pricing
C) Customer analysis
D) Product/service planning
E) Distribution
D
The Robinson-Patman Act affects a company’s
A) pricing methods.
B) trucking methods.
C) production costs.
D) employee costs.
E) culture.
A
Distribution includes
A) customer analysis.
B) pricing.
C) warehousing.
D) advertising.
E) test marketing.
C
Which of the following is not a key question that can reveal internal strengths and weaknesses of the marketing department?
A) Does the firm have an effective sales organization?
B) Is our product quality good?
C) Are markets segmented effectively?
D) Are the firm’s products and services priced appropriately?
E) Does the firm have good liquidity?
E
Which of these is the allocation and reallocation of capital and resources to projects, products, assets and divisions of an organization?
A) Investment decision
B) Dividend decision
C) Financing decision
D) Restructuring decision
E) Strategic decision
A
Which of the three finance/accounting decisions concerns determining the best capital structure for the firm and includes examining various methods by which the firm can raise capital?
A) Investment
B) Dividend
C) Financing
D) Capital budgeting
E) Implementation
C
What category of ratios measures a firm’s ability to meet maturing short-term obligations?
A) Profitability
B) Liquidity
C) Leverage
D) Activity
E) Growth
B
What category of ratios includes return on total assets and return on stockholders’ equity?
A) Leverage
B) Activity
C) Profitability
D) Growth
E) Liquidity
C
What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry?
A) Profitability
B) Liquidity
C) Leverage
D) Activity
E) Growth
E
Which ratio would be considered an activity ratio?
A) Debt-to-equity
B) Net profit margin
C) Average collection period
D) Earnings per share
E) Current ratio
C
Which ratio is calculated by dividing profit before interest and taxes by total interest charges?
A) Inventory turnover
B) Fixed assets turnover
C) Total assets turnover
D) Debt-to-equity ratio
E) Times-interest-earned ratio
E
The times-interest-earned ratio would be classified as a(n)
A) activity ratio.
B) leverage ratio.
C) profitability ratio.
D) liquidity ratio.
E) growth ratio.
B
According to Roger Schroeder, which of the following is not a basic function of production management?
A) Capacity
B) Inventory
C) Workforce
D) Transportation
E) Quality
D
_______ management deals with inputs, transformations and outputs that vary across industries and markets.
A) Marketing
B) Financial
C) Research and Development
D) Production/operations
E) Distribution
D
In most industries, the major costs of producing a product or service are incurred within A) marketing.
B) management.
C) research and development.
D) operations.
E) management information systems.
D
Where is the largest seaport, in terms of ship container traffic processed annually? A) Hong Kong
B) Shanghi
C) Singapore
D) Los Angeles
E) New York
C
________ is a commonly used approach to determine R&D budget allocations. A) Financing as many project proposals as possible
B) Using the percentage of sales method
C) Budgeting for R&D about what competitors spend
D) Deciding how many successful new products are needed
E) All of the above
E
Which of the following ties all business functions together and provides the basis for all managerial decisions?
A) Management
B) Marketing
C) Information
D) Technology
E) Workforce
C
An effective information management system ________ information in such a way that it answers important operating and strategic questions.
A) collects
B) codes
C) stores
D) synthesizes
E) all of the above
E
________ become(s) ________ only when they are evaluated, filtered, condensed, analyzed and organized for a specific purpose, problem, individual, or time.
A) Information; data
B) Information; material
C) Data; information
D) Data; competitive advantages
E) Competitive advantages; material
C
) The process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products is called
A) the resource-based approach.
B) value chain analysis.
C) strategic cost analysis.
D) the internal factor evaluation matrix.
E) cost-benefit analysis.
B
The initial step to implementing value chain analysis is A) attaching a cost to each discrete activity.
B) establishing costs in terms of time.
C) establishing costs in terms of money.
D) converting the cost data into information by looking for competitive cost strengths and weaknesses.
E) dividing a firm’s operations into specific activities or business processes.
E
Which of the following is the first step in developing an IFE Matrix?
A) Determining the organization’s structure
B) Summing the weighted scores for each variable
C) Identifying the organization’s strengths and weaknesses
D) Identifying the organization’s functions of business
E) Determining the lead strategist
C
The IFE Matrix should be ________ in multidivisional firms.
A) constructed for each division
B) all-inclusive
C) constructed only for the major divisions
D) developed before the EFE Matrix
E) revised monthly
A
